Risking small businesses and giving government agencies new political powers are risks not justified by benefits promised by critics.
We’ve heard the saber-rattling from big tech critics who want to break up Facebook, Amazon, Apple and Google. The critics claim they are helping the little guy and that they want more competition. But the new weapons critics seek would give federal regulators unprecedented power and undermine our democracy.
A core tenet of antitrust law and enforcement is to protect “consumer welfare.” This more-than-capable standard enabled the Federal Trade Commission and Department of Justice to take actions against Bayer-Monsanto and Staples-Office Depot for merger concerns, American Airlines for predatory pricing, and Oklahoma Chiropractors for price fixing.
But those with an anti-tech ax to grind want to create a wholly new standard of antitrust enforcement: “dangers to liberty.”
This standard might be emotionally appealing, since we all want to protect “liberty.” And we can imagine that the FTC and the DOJ, armed with this standard, could act aggressively against any big business. Because the “dangers to liberty” standard is so amorphous, government regulators and prosecutors would be unencumbered by fact-finding and detailed economic analysis.
But we want fair and honest antitrust enforcement. The “dangers to liberty” standard would sail us into uncharted waters and be vulnerable to politics and populism.
Suppose now we had a politically-motivated FTC and DOJ no longer restrained by the “consumer welfare” standard. Corporate political speech, protected by the First Amendment and permitted by the “consumer welfare” standard, could be attacked if the FTC regarded it against the administration’s current concept of liberty.
Likewise, many Democrats see most actions by Republicans as “dangers to liberty,” and vice-versa. How would a politically motivated DOJ or FTC deal with “threats to liberty” based on political actions or speech?
Ironically, the Open Markets Institute, a leading advocate for the “dangers to liberty,” worried about this injection of politics into antitrust enforcement. In the institute’s blog, the Koch brothers were the ones doing the injecting, but any partisan group could wield the same weapon.
The nation’s top antitrust enforcer, Assistant Attorney General Makan Delrahim, also warned of this political “dangers to liberty” standard: “The message for enforcers is that in the zealous pursuit of justice through prosecution, we risk prosecuting unjustly.”
Advocates of abandoning the “consumer harm” standard complain that proving consumer harm is impossible when the product or service is free, such as social media platforms. But these same advocates argue that big tech’s use of data can and does harm consumers — a problem that could be addressed by the “consumer welfare” standard.
Moreover, Delrahim explained how the “consumer welfare” standard applies to and is actionable against no-cost businesses.
Regardless of the mechanism used against big businesses, we must also recognize the harm to small businesses from antitrust actions against large online platforms.
Anti-tech advocates claim that “big is bad,” but for America’s small and midsize businesses, the bigger the platform the better for small businesses trying to reach a big audience.
Consider the local greeting-card and stationery store. A decade ago this business could barely afford to place an ad in a local newspaper, let alone on TV or radio. But for less than $10 spent with online platforms, this small business can reach thousands of potential customers, and target them more accurately than ever too.
Risking small businesses and giving government agencies new political powers are risks not justified by benefits promised by critics who want to break up big tech. Let’s retain our consumer welfare standard until anti-tech advocates can show the genuine benefits in their approach.
Critics of big tech should put down their pitchforks before all of us get hurt.